Zuck on THIS: Mobile users propel Facebook to RECORD earnings

Facebook posted strong results for the second quarter of its fiscal 2013 on Wednesday, showing impressive growth in its advertising and payments businesses and earnings that soundly beat analysts' expectations.

Revenue for the quarter was $1.81bn, a 53 per cent increase over the year-ago quarter. Of that total, 88 per cent (or $1.6bn) came from advertising, up 61 per cent from Q2 2012, with Facebook surpassing one million active advertisers for the first time.

Ad revenue from the all-important mobile sector was up, too. In the third quarter of 2012, mobile ads accounted for just 14 per cent of the total revenue, but that figure has grown steadily with each successive quarter. In Q2 of 2013, mobile ads made up around 41 per cent of Facebook's total ad revenue.

Facebook's other revenue source, payments and fees, was up 11 per cent from the year-ago quarter, to a total of $214m.

Taken altogether, the social network's average revenue per user during the second quarter was $1.60, a 18.5 per cent increase from the previous quarter and a 25 per cent hike from the second quarter a year ago.

Even better for Zuck & Co., all of that money coming in translated into strong earnings. Net income for the quarter was $333m, compared to a net loss of $157m for 2012's second quarter. But those figures were both distorted by costs related to share-based compensation and tax adjustments; take those away and Facebook earned $488m in the second quarter, a 65 per cent hike from the $295m it earned during the same period a year ago.

Excluding those taxes and adjustments, earnings were $0.19 per share, up from $0.12 per share in the year-ago quarter and beating the expectations of even the most optimistic analysts. Of the 37 moneymen polled by Yahoo! Finance, the highest estimate came in at $0.18 per share.

The social network's usage figures for the quarter were also encouraging and point to continued growth. Daily active users were up to 699 million, a 27 per cent increase year-over-year. Monthly active users were up 21 per cent, to 1.15 billion.

Analysts often use the ratio of daily to monthly active users as a measure of user engagement, and hence, Facebook's overall health. The figure was 60.8 per cent for the three months ending on June 30, 2013, up 4.1 per cent from the previous quarter and up 5.2 per cent from Q2 of 2012.

Mobile monthly active users were up 51 per cent year-over year, to 819 million. And mobile daily active users numbered 469 million – a 60 per cent increase from the year-ago quarter – for a mobile daily-to-monthly ratio of 57.3 per cent.

Part of that growth was driven by Facebook for Every Phone, the social network's offering that lets users access Facebook from inexpensive, low-powered feature phones. That service has now surpassed 100 million users, CEO Mark Zuckerberg said in a call with financial analysts on Wednesday.

As a result, monthly active users who access Facebook solely using mobile devices were up to 219 million in Q2 of 2013, a 115 per cent increase from the same period a year ago.

In all, it was a solid quarter for the social network, and Wall Street was duly pleased. Facebook's shares were up 1.45 per cent by Wednesday's closing bell but rocketed up another 17 per cent in after-hours trading, to surpass $31 per share. ®